Forex - GBP/USD remains lower as U.K. data, U.S. vote weigh

Published 11/05/2012, 10:30 AM
Updated 11/05/2012, 10:31 AM
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Investing.com - The pound remained lower against the U.S. dollar on Monday, after data showed that the U.K. service sector grew at the slowest pace in nearly two years in October, while uncertainty over U.S. elections also weighed.

GBP/USD hit 1.5958 during U.S. morning trade, the pair's lowest since October 24; the pair subsequently consolidated at 1.5960, shedding 0.40%.

Cable was likely to find support at 1.5914, the low of October 23 and resistance at 1.6039, the session high.

Sterling came under pressure after the U.K. services purchasing managers index fell to 50.6 in October from a reading of 52.2 in September. Analysts had expected the index to ease down to 52.0.

The report said growth of new business eased during the month, leading companies to deplete backlogs of work. Meanwhile, staffing levels were reduced for the second month running.

The weaker-than-expected data fueled concerns over the outlook for the economic recovery and sparked concerns over the possibility of more easing by the Bank of England.

In the U.S., a report showed that the rate of growth in the U.S. service sector slowed in October as new orders declined.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 54.2 from a reading of 55.1 in September.

Analysts had expected the index to decline to 54.5 in October.

Investors were also focusing on the outcome of Tuesday’s U.S. presidential elections, with opinion polls pointing to a close race between incumbent President Barack Obama and Republican challenger Mitt Romney.

Elsewhere, the pound was fractionally higher against the euro with EUR/GBP dipping 0.09%, to hit 0.8005.

Markets were also jittery amid concerns over whether Greece’s parliament will approve a package of spending cuts and tax hikes in a vote on Wednesday, which will determine if Athens receives its next tranche of financial aid.


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